CBDT Scraps Mandatory TAN for Buying NRI Property from October 1

• by Akanksha Mishra
• 2026-09-25 20:19:00

In a major procedural overhaul aimed at reducing compliance friction for domestic property buyers, the Central Board of Direct Taxes (CBDT) has substantially reformed Tax Deducted at Source (TDS) regulations on acquiring immovable properties from Non-Resident Indians (NRIs). Effective October 1, 2026, resident individuals and Hindu Undivided Families (HUFs) will no longer be mandated to secure a separate Tax Deduction and Collection Account Number (TAN) to complete their tax obligations. Instead, the direct tax authority is transitioning the entire remittance and reporting architecture to a seamless, Permanent Account Number (PAN)-based challan-cum-statement mechanism, eliminating bureaucratic bottlenecks that previously complicated cross-border property acquisitions across the country.

What Changes from October 1: Form 141 Schedule E and Crucial Reporting Requirements

While the reform dissolves the burdensome TAN registration barrier, it does not exempt property buyers from their core statutory TDS withholding obligations under the Income Tax Act. To facilitate direct reporting, tax authorities have introduced a dedicated Schedule E within Form 141, designed specifically for property transfers involving non-resident sellers. Under this updated disclosure framework, buyers must furnish comprehensive transaction data, including:

Complete Property Identifiers: Precise geographical address, plot details, and categorization (such as vacant agricultural land, residential floor, or commercial building).

Parties' Verification Data: Complete legal names, PAN details, primary contact credentials, and verified domestic and foreign postal addresses of both the buyer and the NRI seller.

Financial Valuation Metrics: Total agreed contract sale price, official circle rate or stamp duty value (SDV), applicable TDS rate, exact tax amount deducted, and deduction date.

Seller Tax Residence Documents: Documentation records such as the seller's foreign Tax Residency Certificate (TRC) or Tax Identification Number (TIN) where double taxation treaty relief is claimed.

Strict Tracking on Installment Payments: Essential Compliance Rules for Buyers

For real estate acquisitions funded through multi-stage construction-linked plans or structured installment payments, the regulatory framework enforces granular milestone tracking within Form 141. Buyers must record whether the transaction involves a single lump-sum payout or phased installments, specifically declaring the exact sums disbursed in previous cycles, the current tranche amount, the payment phase (initial booking, interim milestone, or final registry installment), the date of credit, and the corresponding tax deducted at applicable rates. Because failure to withhold the requisite statutory deduction continues to attract punitive interest and non-compliance penalties, buyers must ensure they collect their NRI seller’s PAN, verified overseas contact details, and relevant tax status papers before releasing any installment funds post-October 1.

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